The Monetary Authority of Singapore (MAS) will keep the Singapore dollar on a “modest and gradual” appreciation path with no change to its policy stance.

The MAS said in its half-yearly monetary policy statement, issued on April 14, that “Notwithstanding the weak growth outturn in Q1, the level of economic activity should stay on a broad upward trajectory for the rest of the year.”

It added, “Barring a significant shock in the external environment, the Singapore economy should expand at a moderate pace over the course of the year. Wage pressures will persist and firms are likely to pass on business costs to consumer prices.”

Core inflation is expected to stay elevated and the current policy stance is “appropriate for containing domestic and imported sources of inflation, and ensuring medium-term price stability as a basis for sustainable growth,” MAS said.

The MAS manages monetary policy by letting the local dollar appreciate or depreciate against a trade-weighted basket of currencies of Singapore’s major trading partners and competitors.

In its last monetary policy statement in last October, the central bank also said it will maintain its policy of a modest and gradual appreciation of the Singapore dollar, with no change to the slope of the policy band, and the level at which the band is centred.

The Ministry of Trade and Industry announced on the day that Singapore’s economy grew by 5.1 percent in the first quarter from a year ago, lower than the 5.5 percent recorded in the fourth quarter of last year. It predicted a GDP growth of between 2 percent and 4 percent for this year. Meanwhile, the central bank suggested inflation would rise between 2 percent and 3 percent.-VNA